WORLD TRADE  
ORGANIZATION  RESTRICTED 
S/C/M/105 
6 June 2011 
 (11-2775) 
Council for Trade in Services  
  
 
REPORT OF THE MEETING HELD ON 2 MAY 2011 
 
Note by the Secretariat
1 
  
1. On 2 May 2011, the Council for Trade in Serv ices held a meeting under the Chairmanship of 
Ambassador Erwidodo (Indonesia).  The agenda  was contained in document WTO/AIR/3742. 
2. No items of Other Business were added to the agenda. 
3. The agenda was adopted. 
A. SECTORAL AND MODAL DISCUSSIONS  
4. The Chairman recalled that, at its March m eeting, the Council had addressed the last two 
Background Notes produced by the Secretariat for di scussion under that agenda item, on engineering 
services and on statistics on trade flows in services. 
5. The representative of Turkey said that her dele gation had just recently received information 
from the Turkish Central Bank concerning the Secretariat's Background Notes on statistics on trade 
flows in services.  Her delegation would have some corrections to the data reported for Turkey in 
document S/C/W/329/Add.1.  The representative woul d pass these corrections on to the Secretariat. 
6. The Chairman recalled that, at the previous  meeting of the Council, the delegation of 
Switzerland had proposed that the Secretariat produ ce an additional Note, on the role of small- and 
medium-sized enterprises (SMEs) in services trade.  In response to the Swiss proposal, the Secretariat 
had indicated that it would be happy to undertake some work on SMEs, but that it would like to 
reflect further on the issue and report back to the Council.  He therefore offered the floor to the 
Secretariat. 
7. A representative of the Secretariat explained th at, as had been promised, the Secretariat had 
looked into possibilities to respond to the Swiss request.  First, the Secretariat had contacted 
colleagues in other international organizations ( UNCTAD, World Bank, ITC, OECD) to see whether 
they had undertaken any work on SME involvement  in services trade and the problems/impediments 
these encountered at home and/or in export market s.  According to the intelligence gathered, no such 
trade-in-services specific studies existed.  The OE CD had prepared a paper on "Top Barriers and 
Drivers to SME Internationalisation" in 2009, but th is was research about SMEs in general, without a 
services focus.  However, based  on an initiative from Chile, the Working Party of the OCED Trade 
Committee might organize a national or regional workshop, possibly in early 2012, to discuss the 
experience of Chile's private sector and export promotion agency on that subject. 
                                                      
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. S/C/M/105 
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  8. Second, the Secretariat had checked whether any relevant studies had been carried out at 
national level.  Individual Members, including the EU and the United States, had contracted such 
studies about their SMEs' experience in trade.  Some of these also contained services-specific 
information.  A case in point was a study by the US International Trade Commission on SMEs and the 
barriers and opportunities they experienced in export markets.  Other Members might have 
undertaken similar analyses, and it would be useful if  delegations could inform the Secretariat of any 
such work.  The Secretariat would then be in a better position to produce an overview of studies, as 
they were provided by Members, and undertake an analysis based on cross-cutting themes.  
Additionally, SME-related issues might be discussed at  a future meeting to which the authors of such 
studies could be invited. 
9. A third issue for consideration were th e potential 'SME-effects' of current GATS 
commitments.  For example, a recent research pape r started from the assumption that, contrary to 
larger enterprises, SMEs were normally interested in 'soft' forms of access to export markets.  In 
particular, their focus would be on liberal bindings for cross-border supplies, rather than mode 3, and 
on better access for contractual service suppliers, ra ther than for intra-corporate transferees.  
However, while a research project could legitim ately use such assumptions, they might not be 
considered equally relevant for all sectors.  Fu rthermore, a weakness of current GATS commitments 
was that, with the possible exception of recently acceded Members, they were not generally reflective of the actual degree of market openness. 
10. Finally, concerning available statistical info rmation on SMEs' involvement in international 
services trade, the Secretariat had contacted colleagu es working on international trade statistics.  To 
their knowledge, Austria was the only Member to ha ve officially publishe d, through its National 
Bank, data on services trade by size of enterprise.  However, this had been done on a Balance-of-
Payments basis only, thus excluding mode 3, for a sample of enterprises in 2006, and had not been 
updated since, to the Secretariat's knowledge. 
11. The Secretariat was also aware of a presentation on the "Role of Micro and Small Enterprises 
in the Brazilian Services Exports" that had been given by the Brazilian delegation at the OECD 
Working Party on International Trade in Goods and Trade in Services Statistics in September 2010.  It 
had been circulated as an unclassified of OECD doc ument, which the Secretariat would be pleased to 
make available to any interested delegation.  
12. This was the information that the Secretariat had been able to gather as a result of its research.  
Consequently, the Secretariat could not, at that st age, promise a piece of work that lived up to the 
standards it aspired to.  Any work that Members had undertaken on the issue and that they could share 
would be very valuable and gratefully received.  Such additional information would be necessary in 
order to respond effectively and meaningfully to the Swiss proposal. 
13. The representative of the United States said th at the Background Notes addressing specific 
sectors and modes of supply had proven very usef ul.  Now that discussion of those Notes had been 
concluded, it would be helpful to explore thematic , cross-cutting issues.  He indicated that one such 
issue could be the electronic supply of services, and he  would revert to this topic in more detail under 
the agenda item dealing with the E-commerce Work Programme.  His delegation would be interested 
in discussing other such broad-ranging issues of interest to Members, and in this regard was 
supportive of undertaking more work on the SMEs issues raised by Switzerland. 
14. The representative of the European Union under scored the analysis of the Secretariat on 
SMEs, adding that the topic deserved attention and w as worthy of further analysis.  As concerned the 
information mentioned by the Secretariat with regard  to Austria, the EU would look into the data and 
might provide any additional information that c ould facilitate the work of the Secretariat.  S/C/M/105 
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  15. The Chairman said that the Council would take note  of the statements made and revert to this 
item at its next meeting. 
16. It was so agreed. 
B. INTERNATIONAL MOBILE ROAMING  
17. The Chairman recalled that, at the previous meeting of the Council, the delegations of 
Australia, Norway and the United States had intr oduced a communication, in document S/C/W/335, 
containing a proposal for a workshop on internationa l mobile roaming and the applicability of the 
GATS.  Members had expressed considerable support for and interest in the proposed workshop.  
However, a couple of questions had been raised with regard to the timing and agenda.  It had therefore 
been decided that the Chairman would engage in in formal consultations to see how best to proceed on 
the proposal. 
18. Small group consultations had accordingly been held on 22 March.  Regretfully, on that 
occasion no convergence could be found on the way forward.  The Chairman therefore sought 
delegations' views again, to see if the Council coul d come to an agreement on the proposed workshop 
on international mobile roaming. 
19. The representative of Australia said that consu ltations on the co-sponsors' proposal had also 
taken place amongst delegations.  These consultations had revealed widespread support for discussing 
international mobile roaming.  She suggested that  the issue be addressed as a dedicated discussion on 
the Council's agenda, rather than in workshop fo rmat, on the basis of a Background Note to be 
prepared by the Secretariat.  This would allow Members to exchange views on the issue, and in particular on those raised in part II of the spons ors' proposal (document S/C/W/335).  In terms of 
timing, the dedicated discussion could already ta ke place in June, but this depended on when the 
Secretariat Note could be made available. 
20. The representative of India thanked Australia for its flexibility.  India had expressed technical 
as well as horizontal reservations on the proposed  workshop, and those reservations were still 
pertinent.  His delegation could, however, agree to a dedicated discussion on international mobile 
roaming, on condition that no outside participants , industry representatives, or OECD officials be 
invited.  He could support the suggestion that th e Secretariat draft a Background Note on the issue, 
but stressed that no report of the discussion shoul d be provided to other international bodies 
considering the issue of international mobile roamin g.  His delegation was flexible as to the timing of 
the discussion. 
21. The representatives of the United States;  Norway;  Israel;  New Zealand;  Japan;  Canada;  
the European Union;  Hong Kong, China;  Indonesia;  Singapore and Chinese Taipei expressed 
support for Australia's proposal.  Whilst also supporti ve, the representative of Turkey indicated that 
her delegation would prefer to hold th e dedicated discussion in September. 
22. The Chairman said that there was a general agreement to hold a dedicated discussion on 
international mobile roaming and that scheduling it in June seemed to enjoy more support than 
September.  The Secretariat would produce a Background  Note on the issue, and could do so by June. 
23. The representative of Turkey explained that she had suggested holding the discussion in 
September to ensure national authorities could be present, but she could go along with the suggestion 
to schedule it in June. 
24. The Chairman concluded that the Council woul d hold a dedicated discussion on international 
mobile roaming at its June meeting, on the basi s of a Secretariat Background Note.  He underscored S/C/M/105 
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  that this would not be one-off opportunity, but just the beginning of the Council's consideration of the 
issue. 
25. It was so agreed. 
C. REVIEW OF ARTICLE II (MFN)  EXEMPTIONS  
26. The Chairman recalled that, on 9 March, the Council had held a second meeting dedicated to 
the review of Article II (MFN) exemptions.  At th e end of that meeting, it had been decided that 
discussions under the review would continue under an  item on the Council's agenda, rather than in 
dedicated meetings.  He also recalled that, at  the March meeting, Members had concluded the 
examination of all MFN exemptions listed.  Noneth eless, it had been agreed that delegations would 
have an opportunity to revert to any of the ex emptions reviewed, including to provide outstanding 
replies to specific questions raised.  Accordingly,  he invited delegations to make any additional 
comments they might have on the MFN exemptions examined. 
27. The representative of Hong Kong, China said that, after reviewing the questions posed by his 
delegation and the answers received, he had come to  the conclusion that most Members had attempted 
to provide replies, even if a few questions had not b een responded to, either completely or in part.  He 
did not intend to raise further specific queries,  but encouraged those Members who had received 
questions, but were lacking relevant  information to address them, to provide answers as soon as they 
obtained the relevant intelligence.  His delegation would also follow-up bilaterally on a number of 
questions, in order to have a produc tive exchange outside the Council. 
28. By way of general comment, the representative of Japan said that the primary objective of the 
review was to share information and develop a common understanding on genuinely necessary MFN 
exemptions, so as to reach the ultimate goal of reducing MFN exemptions. 
29. At the March meeting, three Members had referre d to the possibility of eliminating some of 
their MFN exemptions.  Although appreciative of th ese statements within the context of the review, 
Japan considered that there was a need to provide  clear information on the current status of MFN 
exemptions and on the reasons why individual Members needed to maintain those exemptions.  In that 
respect, his delegation had appreciated the informat ion provided by the United States at the March 
meeting that it had not made use of its MFN exempt ion in financial services during the previous five 
years.  Members with MFN exemptions were encour aged to provide information on the current status 
of their exemptions.   While the possible elim ination of MFN exemptions was good news, Members 
also needed to create an atmo sphere conducive to sharing information on the remaining MFN 
exemptions. 
30. The Chairman said that the Council would take not e of the statements made.  He then turned 
to the second issue for discussion under the agenda it em, i.e. the mandate cont ained in paragraph 4(b) 
of the Annex on Article II Exemptions that the Counc il determine "the date of  any further review".  
He recalled that, although some initial views on this issue had been presented at the March meeting, 
the Council had decided to postpone the discussion. 
31. The representative of Hong Kong, China said that, after three reviews, most, if not all, MFN 
exemptions that had been listed persisted.  Thus, th e original justification for the review endured.  He 
therefore proposed that the Council follow past prac tice and hold its next review five years from the 
current one, i.e. in 2015. 
32. The representative of the United States said that , as the Council had just concluded its third 
review, it was hard to say with certainty when the next one should begin.  He noted that holding the  S/C/M/105 
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  next review five years past the conclusion date would mean scheduling it no earlier than 2016.  While 
having no firm date in mind, they felt that the ne xt review should be held further down the road. 
33. The representative of the European Union said th at his delegation could agree to hold the next 
review in 2016, but was open to further discussion. 
34. The representative of Hong Kong, China explained that he had proposed 2015 as this was five 
years after the start of the review just concluded,  but that, given the minor difference in timing, his 
delegation could be flexible and agr ee to hold the next review in 2016. 
35. The Chairman proposed that the Council agree to close the current review and to hold its next 
review of Article II (MFN) exemptions no later than 2016. 
36. It was so agreed. 
37. The representative of Australia noted that, while  her delegation agreed with the Chairman's 
conclusions, this did not necessarily set a precedent for any other reviews that the Council might agree 
to or the timeframes in which they were set. 
D. WORK PROGRAMME ON ELECTRONIC COMMERCE  
38. The Chairman indicated that the Work Progr amme on Electronic Commerce had been placed 
on the Council's agenda at the request of the delegation of the United States. 
39. The representative of the United States explained that his delegation sought to examine more 
closely the services-related issues of electronic co mmerce.  Members would recall that, at the 2009 
Ministerial Conference, they had agreed to "i ntensively reinvigorate" the Work Programme on 
Electronic Commerce based on the guidelines from 1998. 
40. The number of issues related to electronic commerce was quite vast.  In services, the increase 
in the supply of services via electronic means ha d created many opportunities and many challenges 
for service suppliers, both from developed and developing countries. 
41. In his delegation's view, it would be timely to have the Council examine some of those issues 
in more depth.  Now that the Secretariat had co mpleted its sectoral updates, Members might wish to 
draw upon those Background Notes as a way to fu rther enlighten each other’s knowledge about the 
issues surrounding the electronic supply of servi ces.  Indeed, this was among the many issues 
identified in the 1998 Work Programme direct ed to the Council for Trade in Services. 
42. As an initial step, the Secretariat could produ ce a document that compiled elements from the 
Background Notes that related to e-commerce (or the electronic supply of services).  Alternatively, 
the Secretariat could help by supplementing its  Background Note on cross-border supply (modes 1 
and 2) and focus on the electronic supply of services in various sectors.  This type of consolidated 
Note could greatly enhance future discussions.  His delegation would also encourage Members to 
submit contributions on this issue as well. 
43. Future discussions in the Council could build upon the initial dedicated discussion on the 
Impact of Technological Developm ents on Regulatory and Complian ce Aspects of Banking and Other 
Financial Services under the GATS, an issue rais ed by Pakistan in the Committee on Trade in 
Financial Services.  That dedicated discussion had been a useful opportunity for Members to highlight 
their experiences with e-finance; a similar shar ing of experiences on developments in electronic 
commerce might be beneficial for Members.  Partic ular attention could be given to the important 
developmental gains e-commerce could provide, wh ich also enabled many SMEs to integrate S/C/M/105 
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  themselves into the global trade environment, as ha d been suggested by Switzerland at the previous 
Council meeting.  For example, one issue that might  be worth examining were mobile applications.  
These applications were being down loaded in the billions, and many  were being used by service 
suppliers, and their customers, to expand business o pportunities, gain knowledge, and improve lives.  
The implications of trade in mobile applicati ons was another worthy topic for consideration. 
44. His delegation would expect that the results of a dedicated discussion on the topic would be 
presented to the July 2011 General Council meeting,  as a contribution to the reinvigorated Work 
Programme on Electronic Commerce. 
45. The representative of Pakistan recalled that the Work Programme on Electronic Commerce 
had been reinvigorated by the 2009 Ministerial C onference:  the General Council had been mandated 
to hold periodic reviews and to report to the Minist erial Conference to be held in December 2011.  It 
was therefore incumbent upon Members to intensify thei r work in this area.  His delegation was fully 
supportive of resuming discussions under the Work Pr ogramme, initially on the basis of a Secretariat 
compilation of elements from the Background Notes that referred to e-commerce.  The ensuing 
discussion could form the basis of the contribution of  the Council for Trade in Services to the General 
Council review in July 2011. 
46. The representative of Switzerland supported th e proposal for a Secretariat compilation of 
elements from the Background Notes that referred to e-commerce.  He stressed that this could a prove 
valuable input for further discussions by Members and complement the analysis of the role of SMEs 
in services trade, by highlighting the impo rtance of e-commerce for those suppliers. 
47. Recognising the economic growth opportunities of  e-commerce, the representative of Canada 
was very supportive of the Ministerial Decision to  reinvigorate the Work Programme.  Canada could 
endorse the US suggestion for a Secretariat compilation, and considered it a positive first step to inform future discussions.  The E-commerce Work  Programme would allow Members to share their 
own experiences with e-commerce, discuss the deve lopmental aspects as well as the implications for 
SMEs. 
48. The representative of the European Union echoe d the statements made by the United States 
and Pakistan.  He added that discussions under the Work Programme could tackle issues related to 
specific barriers, developmental aspects, linka ges with SMEs, consumer protection and the 
application of domestic legislation. 
49. The representative of Hong Kong, China said that, in light of the Decision taken at the 2009 
Ministerial Conference, discussions under the Work Programme were overdue.  The US proposal was 
timely and he offered his delegation's support also for the Secretariat compilation. 
50. The representative of Japan endorsed the US pr oposal that Secretariat prepare a compilation 
of elements from the Background Notes related to e-commerce.  Such a compilation would allow 
Members to have a deeper discussion of the issue.   Since the Ministerial Decision required Members 
to ‘include development-related issues’ in their deliberations, it would be useful for the Council to 
focus on how electronic commerce could help the economies of developing countries better integrate 
into the multilateral trading system, as well as on th e role it played in the development of SMEs. 
51. The representative of Australia echoed the statement made by the United States.  She 
underscored the usefulness of discussing the refe rences to e-commerce found in the Background 
Notes in the context of the Work Programme and supported the proposal that the Secretariat compile 
them in a Note to stimulate the discussion.  She further noted the valuable role of e-commerce for 
SMEs, and the importance of addr essing its developmental aspects.  S/C/M/105 
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  52. The representative of New Zealand echoed the statement of Australia and endorsed the 
proposal for a Secretariat's compilation.  In li ght of the General Counc il mandate and reporting 
requirements to the Ministerial at the end of the year, it was appropriate to explore how the Services Council could contribute to the discussion. 
53. The representative of Chinese Taipei said that  his delegation could go along with the US 
proposal to have the Secretariat prepare a compilatio n.  This could provide a quick snapshot on the 
latest developments in services trade related to e-commerce.  On the basis of the Secretariat’s 
compilation, Members could further explore issues for future discussion. 
54. The representative of Singapore supported the re invigoration of the 1998 Work Programme 
and the proposal that the Secretariat prepare a comp ilation.  The representative of Korea also endorsed 
the US initiative to revive the discussion of e-comme rce, on the basis of a Secretariat compilation. 
55. A representative of the Secretariat said that  the Secretariat was pleased to produce a 
compilation of e-commerce-related information c ontained in the Background Notes for the Council 
meeting in June.  On the other hand, a more anal ytical Note on e-commerce would not be ready in 
time for that meeting, given that the Secretariat had just been tasked with preparing another Note for 
June, on international mobile roaming.  The repr esentative stressed, however, that the Secretariat 
stood ready to draft a more considered piece, possibly for September, that could take a closer look at 
policy, regulatory and technological de velopments related to e-commerce. 
56. The representative of the United States said that the Secretariat compilation represented a first 
step to reinvigorate discussions on e-commerce at the June meeting of the Council.  Members could 
then identify further issues that they  might like to discuss in September. 
57. The representative of Canada concurred that the Secretariat compilation was only a first step 
to restart the discussion, and that Members' delibera tion in June would guide further Secretariat work. 
58. The representative of Australia echoed the statements made by the United States and Canada.  
She said that the roaming discussion was also re levant to the e-commerce Work Programme, and 
wondered if there was a way of formally linking to two issues and including the roaming discussion in 
the Work Programme.  She added that the discussion in the Committee on Trade in Financial Services 
could also be reported under the Work Programme. 
59. The representative of the European Union su pported having the Secretariat compilation 
produced for the June meeting of the Council. 
60. The Chairman said that the Council would take not e of the statements made.  The Secretariat 
would prepare a compilation of elements from the Ba ckground Notes related to e-commerce to have a 
first discussion under this agenda item at the June meeting of the Council. 
61. The meeting was adjourned. 
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